WestLB AG

The "LB" in WestLB"'s name stands for Landesbank, a term used to
describe a particular class of regional wholesale banks owned by
the German government. WestLB was established in 1969 by the merger
of Münster-based Landesbank für Westfalen Girozentrale and
Düsseldorf's Rheinische Girozentrale und Provinzialbank, both of
which had been operating since the mid-1800s; in 2002, the firm was
converted into a joint stock company, though it is still partially
owned by the government of North Rhine-Westphalia. After 2005, the
bank began operating without state liability guarantees.

WestLB also serves as a central bank for the Sparkassen, or
regional savings banks, of North Rhine-Westphalia and Brandenburg.
Further afield, the bank serves multinational corporate clients,
mid-cap companies, government agencies and individuals in Europe,
Asia and the Americas, providing a full range of corporate finance,
asset management, project finance, lending, transaction processing
and private banking services. The firm's footprint is largely
concentrated in and around Germany, but a handful of offices
operate elsewhere around the world, including hubs in London and
New York. Meanwhile, the 100-plus Sparkassen operate over 3,000
branches.

For WestLB, the global financial meltdown struck early. Hammered by
the 2007 subprime crisis, the bank declared a loss of €1.6 billion
heading in to 2008, with write-downs totaling €2 billion. The
government of North Rhine-Westphalia asserted its authority and
shifted €23 billion of bad loans toxic assets from WestLB's balance
sheet to a special purpose vehicle (SPV) called Phoenix, a move
dubbed "ring-fencing." At the same time, the state offered to
underwrite €5 billion in losses. These efforts gave WestLB some
stability, but also opened new lines of commitment to the state-and
calls for restructuring. In early 2008, as talks among the bank,
the government and EU regulators got underway, WestLB began cutting
several hundred jobs in Germany and abroad.

Mid-cap pros

In 2008, WestLB refocused, ramping up its services for mid-cap
clients and expanding its range to companies with annual sales of
€50 million and up. According to the firm, it gained some 280 new
mid-cap clients by the end of fiscal year 2008. This made sense:
mid-cap companies employ 70 per cent of the workforce in North
Rhine-Westphalia and are a significant chunk of Germany's overall
economy. German mid-caps are also becoming increasingly important
in neighbouring markets, and WestLB has been able to leverage its
relationships with the regional Sparkassen to promote and execute
services.

The bank even created proM, a specific range of products for its
mid-cap clients. This lineup includes products that cover asset
securitization, equity and debt finance, long-term finance and
security for unsettled claims.